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Bad Government Economics


How Government Ought NOT to Act Economically

I am often mean to Obama, all the more as I know that, after all, he is just the president. So he presides over a whole system of oligarchies. Best economic advice? For the “Democratic” establishment, it meant Larry Summers, Bob Rubin, Bill Clinton, Greenspan, etc. Who was he to contradict Summers or Krugman? Those two were within the White House nearly 30 years before Obama got there. They both, and all other very serious economists, told Obama he had to save the banks, no strings attached.

In the matter of energy and science policy, Obama made apparently the best choice: Chu, a Physics Nobel Prize winner who was also the successful manager of the giant Lawrence Berkeley Research Laboratory.

But getting a Nobel in something does not mean one has the best ideas, especially in other fields. It can make one arrogant, stubborn, over-confident in one’s brains.

In the end, the government of the USA intervened erroneous, moving away from fundamental research (both in science and the foundations of technology).

Dr. Chu cancelled all research in fuel cells, while instead diverting money towards. start-ups. He may as well have financed hamburger stands. In particular, Chu decided to finance electric cars. This means, in practice cars made by Elon Musk, an expert on how to get government support.

A French electric car held the world’s speed record, and was first to reach 100km/h. That was in. 1900. So electric cars are not exactly new. Batteries are better than 115 years ago. But still, not good enough.

Battery technology will require a breakthrough: one could not make a bus, or truck, using electric batteries. The battery pack would be too heavy, the range too limited, the time to refuel, too great.

A number of Asian companies, including Toyota, are leasing Fuel Cell Cars. They work by transforming hydrogen into electricity.

Elon Musk called Fuel cell cars, “fool” cars. At best, he does not know how to spell. At worst, he knows no physics (and that’s the case). Fuel cells have enormous efficiency. Musk’s “electric” cars, actually run on COAL electricity for 50% (as the whole USA does). I know Musk talks about the sun to recharge his cars, but that’s not the case. The solar case would have to go through hydrogen!

But of course, this is not about physics, but politics. Musk got billions from the Federal Government, from NASA.

So the fools are those who believe the crafty politician, Elon Musk.

OK, electric vehicles have their uses, for short commutes. They are great against local pollution. But let’s not run out of lithium? OK? As it is, the Tesla Model S, which gets a $10,000 subsidy per vehicle, is perfect for Californian plutocrats who want to have priority on the roads, while enjoying the money they get from taxpayers for driving in style.

The main problem with renewable energies, right now, is that there is no way to store it efficiently (aside from dams). Cracking water to make hydrogen would be an obvious way. Liquid Hydrogen has about THREE times the energy of gasoline per mass. As fuel cells have twice the hypothetical maximum of a thermal engine (where electric vehicles get their electricity from), one sees that a fuel cell car, far from being foolish, with existing technology, if the hydrogen was from renewables, would be at least six times more efficient than electric vehicles.

Under Obama, Secretary Chu, in an apparent act of corruption, quit all fundamental research of fuel cells. But fuel cells allowed Americans to land on the Moon. Now Chu is sitting pretty in Stanford, complete with start-up money, a few miles from Tesla.

Chu in his own words:

A Hydrogen Economy is necessary. See:


This Chu misadventure shows the superiority of Direct Democracy: had Chu’s policies be widely debated over the Internet, and had Obama got a digest of the conclusions, it is highly unlikely that he (and scientifically ignorant, dubiously enriched very wealthy California Senator Feinstein, etc.) would have decided to go along Chu’s craziness.

Recently Paul Krugman, still uninformed in that respect, was lauding Chu’s policies in the New York Times.

But the truth is, the fundamental research breakthroughs are not coming up at the rate they would be, if the opposite of what Chu did had been, instead, implemented (that is massive more fundamental research).

It’s not just a question of the advancement of civilization, but of national defense.

Patrice Ayme


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